Gold News

Gold prices predicted to stay high

Gold investments are likely to stay strong throughout 2008, it has been predicted.

According to investment trust firm Alliance Trust, the yellow metal will perform well this year as long as the dollar stays weak.

Prices have fallen today (January 21st) to an 11-day low, according to Reuters, dropping to $868.60 per ounce this morning. However, a number of analysts have claimed that 2008 could be the year that the $1,000 an ounce milestone is reached.

"Gold is expected to remain strong, but this is very dependent on continued weakness in the dollar and continuing concern about the fall-out from the subprime crisis," commented Angus McPhail, global oil and natural resources analyst for Alliance Trust.

However, in terms of the overall mining sector, the development of Asian countries such as India and China could result in lower growth in the industry, he added.

Energy intensity in these nations will fall in the long-term as they become developed countries, rather than remaining as developing nations, potentially leading to lower commodity demand, Mr McPhail explained.

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